Boulder rolling toward recovery

by Eric Schroeder
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Boulder Brands products, Gluteno bread, Udi's bagels, evol meal
Portfolio optimization will become a core process competency for Boulder Brands in the future.

BOULDER, Colo. – Boulder Brands, Inc.’s efforts to realign its organization, focus on operational effectiveness and stabilize sales resulted in improved results in the third quarter. Net income in the quarter ended Sept. 30 was $354,000, equal to 1 cent per share on the common stock, which compared with a loss of $132,159,000 in the same period a year ago. Sales totaled $132,917,000, which compared with $133,865,000 a year ago. 

Jim Leighton, interim CEO, Boulder Brands
Jim Leighton, interim CEO of Boulder Brands

“During last quarter’s call, I outlined our actions to improve our financial results and build a healthier, long-term sustainable growth platform,” Jim Leighton, interim CEO and COO, said during a Nov. 5 conference call with analysts. “This includes one, being more efficient with our overall cost structure. Two, be more effective in managing our brands, products and channels. And three, becoming more balanced and efficient with our marketing programs. Since we announced our restructuring and a reduction in cash G&A, I’m pleased with our progress and our initial results give us confidence in our initiatives.”

Leighton reviewed the impact of each of Boulder’s prioritized initiatives, starting with the company’s focus on long-term overall profitability and cost structure.

“We continue to improve our operations with efforts, including, but not limited to, outsourcing specific manufacturing to co-packers where we can gain savings, increase the efficiency of our four North American plants and improving upon our supply chain from a service, quality and cost perspective,” he said. “With these opportunities, although they’re long term in nature, we are well on our way to implementing them and have already begun to see the benefits and should continue to see more favorable results in 2016.”

The company also has focused managing its portfolio more effectively and finding the right channels for growth, he said. To that end, Leighton said Boulder discontinued Level Life in the third quarter because it was “small in size and less strategic to our overall vision.” The company also has identified several items for stock-keeping unit rationalization during 2016.

“Portfolio optimization will become a core process competency at Boulder Brands,” he said.

On the innovation front, Boulder during the third quarter introduced EVOL Cups in Target stores with 12 SKUs across three platforms.

“This new frozen food format leverages the way many consumers want to eat,” Leighton said. “Smaller portion meals with unique ingredients that are portable, convenient and tastes great. The three EVOL portable cup platforms include veggie, fajita and breakfast scrambles.”

evol cups
Boulder during the third quarter introduced EVOL Cups in Target stores with 12 SKUs across three platforms.

Finally, the company is taking a twofold approach to being more balanced and effective in marketing. First, Leighton said Boulder is investing toward having a better understanding of its consumers and the roles brands play in their lives.

“This will help provide us with the insights and inform long-term brand strategy positioning,” he said.

Second, and more near term in nature, Boulder is being more disciplined and efficient in its spending.

“We’ve intentionally focused back half marketing funds against our key brands, across key categories, among our top retailers,” he explained. “Specifically, we have been diligently validating our initial consumer research in programs to give us confidence before we roll out more broadly. Our approach will be to activate velocity using tactics like regional FSIs, digital coupon, in-store sampling and merchandising to help support existing distribution. These programs began in November and will ramp up significantly in December and into 2016.

“We are extremely focused on improving velocities in key categories through effective retail and consumer programs, as well as renovation and innovation and pricing and merchandising strategies. Where implemented, these strategies are already having a positive impact in velocities for several of our key categories.”

For the nine months ended Sept. 30, Boulder posted a loss of $1,150,000, which compared with a loss of $128,897,000 in the same period a year ago. Sales for the nine-month period were $379,634,000, down from $388,065,000.

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